A picture of the North – unlocking private investment to sustain the rural economy

Country Land and Business Association

Rural businesses are pumping £1bn a year (2015) into the North of England’s economy, but they need better policies to give them the confidence to continue investing in future. The Northern region’s annual investment is more than double the investment made in 2012.

Nationally, investment has increased by 38% since 2012 with rural businesses investing £13bn per year.

These are among the findings of the Country Land and Business Association’s (CLA’s) Rural Business 2030 report, a year-long study based on a member survey and a series of expert discussions and seminars.

At the organisation’s inaugural rural business conference in Westminster today, the CLA will ask politicians including Defra secretary Andrea Leadsom to do more to help the countryside reach its economic potential.

But it also warned that if ministers failed to include the countryside in future political thinking then the uncertainties of Brexit, allied to volatile agricultural prices, could severely harm the prospects of investments into the rural economy.

The report says 35% of rural land-owning businesses considered expected changes in government policies to be a barrier to making investments in the future. However, greater confidence in the economy and government policy, can significantly improve investment to more than £16bn by 2020.

CLA North Regional Adviser, Jane Harrison, said: “The government’s vision of building a long term economic strategy should take stock of the rural economy, both nationally and within our region.

“Our well-establish rural business sector can play an even bigger roll in the wider northern economy if it is given recognition in the government’s longer term plans. A policy framework which incorporates the rural economy’s needs and aspirations will certainly boost the confidence of landowners and rural businesses to bullishly make investment decisions, with benefits spiralling out across the region.”

“The barriers that are holding back many rural businesses need to be removed for it to prosper within, and contribute to, the regional economy. Issues related to poor broadband connectivity, a bureaucratic planning system, and taxation regime should all be addressed.”

The report says almost half of family farms in the CLA’s northern region had been family-owned for between 51 and 100 years, and a quarter for over a century.

It outlines the diversity of enterprise in the northern region’s countryside, with land-owning rural businesses undertaking an average of four different business activities. Traditional farming activities still dominate the mix of activities with livestock farming (61%) and food crops (38%), followed closely by acting as landlords for residential properties (32%).

Other activities in showing the diverse nature of activities include, forestry (27%), renewable energy (27%), farm tenancies and land rental (both at 25%), leisure and sport (17%), and tourism (13%). Nationally, the north most frequently cited leisure, sport and tourism as part of their diverse mix of activities.

The most common reason given in the North for not investing was lack of access to funding. Reluctance to invest is also rooted in planning issues (50%), prohibitive upfront costs and regulations (29%), while a third of respondents nationally did not feel they would see a return on their investment.

In terms of future investment, respondents in the North were most likely to invest in infrastructure and properties/buildings used by its own business.

Nationally, the report says 59% of land-owning rural businesses want to invest in housing, but 49% cited problems with the planning system to be a barrier to making investments in the future.

CLA North Regional Surveyor, Robert Frewen, said: “The need for a more streamlined planning and building control framework is clearly required to facilitate and encourage future investment by rural land-owning businesses.”

He said: “If it is the government’s vision to increase housing in rural areas, then this needs to be translated into action locally, especially within councils’ local plans which often don’t reflect issues vital to the rural economy. It is especially important to remove any existing barriers that act as a disincentive to invest.”